Netflix adds 2.41M subscribers, soaring past expectations

Things are looking up for Netflix this quarter. The streamer added  2.41 million subscribers, bringing the total to 223.09 million. Netflix expected a net gain of 1 million subs in the third quarter, so today’s results far exceed its own expectations and  analysts’ expectations. The company reported earning $7.93 billion in revenue in Q3 2022, whereas analysts predicted $7.85 billion.

This will be Netflix’s first increase in a while, particularly in its U.S. and Canada subscriber base. The company reported a spike in 104,000 subscribers in the region, making the new total 73.4 million. The last time Netflix experienced subscriber growth in the U.S. and Canada was in  Q4 2021.

The company expects 4.5 million paid net adds in Q4 2022.

Netflix experienced  two very grim quarters in recent months, losing a total of  1.2 million global subscribers. A significant number of layoffs have also occurred, including the more recent downsizing of its  animation department. However, with the addition of its new  ad-supported tier coming to the platform in November, the company has potentially opened itself up to new customers looking for a cheaper way to stream.

“The reaction from advertisers so far has been extremely positive, and we believe that more choice, especially for more price-conscious consumers, will translate into meaningful incremental revenue and operating profit over time. That said, it’s still very early days, and since we’re keeping our existing plans ad-free, it will take us time to build up our membership base and the associated ad revenue,” Netflix added.

Netflix revealed last week that the Basic with Ads plan would cost $6.99 per month and include four to five minutes of advertisements an hour for TV shows and movies. The launch will occur one month before rival Disney+’s  ad-supported tier, which will cost  $7.99 per month.

Netflix launched a  profile transfer feature  yesterday to help account members transition to their own separate accounts without losing personalized recommendations, viewing history and other custom settings.